In a report released yesterday, Patrick Cunningham from Citi reiterated a Hold rating on Dow Inc, with a price target of $24.00.
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Patrick Cunningham has given his Hold rating due to a combination of factors impacting Dow Inc. The decision to cut dividends by 50% is seen as a necessary step to provide the company with more financial flexibility amidst a prolonged downturn in the commodity chemicals market. This move raises questions about whether other industry players will follow suit with similar dividend adjustments.
Additionally, the company’s guidance for price hikes in its Performance and Specialty Plastics segment is met with skepticism, as supply remains abundant and recent tariff uncertainties have kept spot prices relatively stable. Furthermore, the Performance Materials and Coatings segment is facing challenges due to declining siloxane prices and reduced volumes, which are compressing margins. Despite Dow’s efforts to implement cost-saving measures and resolve ongoing issues, the limited visibility on future earnings leads to a cautious outlook. Consequently, the earnings estimates for the upcoming years have been lowered, reflecting these ongoing challenges, and contributing to the Hold rating.
In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $27.00 price target.
DOW’s price has also changed moderately for the past six months – from $41.370 to $25.070, which is a -39.40% drop .